O.C.'s housing crunch: Beating the high prices

Matt Vevoda, 30, drives the 261 Eastern Transportation Corridor toll road to start his 70-mile commute from his job in Irvine to his home in San Jacinto, near Hemet. In 2011, after talking to friends paying high rents in Orange County and factoring in the expenses that come along with a hefty commute, Vevoda and his wife bought a three-bedroom, two-bath home for less than $200,000 in San Jacinto. While the commute can be tough, at times taking nearly three hours, he says that he's still saving money. LEONARD ORTIZ, ORANGE COUNTY REGISTER

Where she found a home: Noelle Park, 46, Eastvale

Noelle Park, a nurse, lived and rented in Newport Heights for 17 years. When she and her husband found themselves in a position to buy a home, they found the prices in Orange County too high. Park said the homes they could afford were not in the best of neighborhoods.

"We didn't want to be the people on the block who overpaid for a house in a bad neighborhood," she said. "So that drove us out of the county."

About one month ago, Park and her husband bought a home in Eastvale, near Corona. Because she works in Irvine, Park commutes three days a week, a drive that takes her 25 minutes each way with no traffic and 40 to 50 minutes during rush hour. But as the owner of a home that is in a good neighborhood with highly-rated schools, she said the commute is worth it.

"There is so much wealth in Orange County that I think people will buy there no matter what the cost," she said. "But it's kind of chasing us homegrown people out."

Where she found a home: Cole Harmonson, 40, North Hollywood

Cole Harmonson grew weary of the corporate life and Orange County's high rents. She lived in Tustin Ranch for nearly 17 years and was paying as much as $2,450 a month. A year and a half ago, Harmonson decided to start her own company specializing in event marketing, graphic design and social media. Part of that decision was giving up her apartment and moving to North Hollywood to save money.

"Sure there are less beaches here," she joked. "But the roar of helicopters almost mimics the ocean."

Harmonson, who started Cole Event Group, now commutes to Orange County several times a week to meet with clients. While often dealing with what she calls a "grouchy" commute, she says the trade-off was well worth it. She's even begun saving to buy a home.

"That's what happens in Orange County," she said. "People will pay the price of a mortgage to live in as much luxury as possible. I decided to be more fiscally conservative and lose that luxury in order to build my company."

Matt Vevoda loves his job in Orange County. But when he was in the market for a home a couple years ago, buying within county lines didn't quite enter into the equation.

The 30-year-old works as an associate marketing manager at Paciolan, an Irvine company providing sports and entertainment venues with software for automated ticketing. It's what Vevoda calls a dream job. And despite a sometimes brutal commute that can take him anywhere from one hour and a half to three in bad traffic, Vevoda saw an opportunity to get more bang for his buck outside the county.

In 2011, after talking to friends paying high rents in Orange County and factoring in the expenses that come along with a hefty commute, Vevoda and his wife bought a three-bedroom, two-bath home for under $200,000 in San Jacinto, near Hemet, roughly a 70-mile drive. While the commute can be tough, he says that he's still saving money.

"It was a no-brainer," Vevoda said. "My mortgage, including all my taxes, is still cheaper than it would have been to rent in Orange County."

Vevoda's situation is not unique. The county's high housing costs and lack of inventory – juxtaposed with some excellent employment opportunities – are forcing some, like Vevoda, to be more flexible and creative. These circumstances are also forcing some to swallow their pride and ask for help.

With the median home price in the county at $535,000 in April (up 27.4 percent from April 2012, according to DataQuick) and residents earning an average of approximately $50,000 per year, according to the U.S. Department of Commerce, many are finding that they simply can't afford to buy.

Jeff Lazerson, president of Laguna Niguel-based Mortgage Grader, said there's a lack of sellers. He attributes some of that to a lack of confidence among what he calls contingency buyers, the traditional homeowner who is looking to sell and upgrade. Combined with a lack of new building taking place in the county, Lazerson said that the market is particularly tough for first-time buyers.

"That person with a minimum down payment almost doesn't have a prayer anymore," he said. "In the past, we were able to make deals with people who were going through FHA or with 5 percent down, but now I have a stack of people who are pre-approved and just waiting to get their offers accepted. It's just awful."

Lazerson also said that the market is on the upswing because of lower interest rates facilitated by the federal government, something that he feels is fueling an improving economy – though recently those interest rates have edged up. And while the higher prices are translating to a very competitive market for buyers and renters, Lazerson said those who already own homes are enjoying an increase in equity.

Martin Cueva, owner of Advance Realty in Santa Ana, said that the problem can be attributed to the lack of properties on the market and that foreclosed properties are being strategically withheld from buyers.

"The banks take away 10,000 properties, then they only put out 1,000 and there's nothing we can do about it," said Cueva, who has been a Realtor for 21 years. "I've been in all kinds of markets and this is about the worst I've seen simply because there are no houses."

Rents in the county are also at all-time highs. Apartment research firm RealFacts reports the average rent for all size apartments in large complexes in the county was $1,646 a month in the first quarter. That's up 4.3 percent, or $68 a month, from the first quarter of 2012. A report by the National Low-Income Housing Coalition indicated that in 2012, the hourly wage needed to afford a two-bedroom rental in Orange County was $31.77, making it the fifth-most expensive region in the nation.

Some residents unable to buy a home are looking at other options like staying with their families.

While the thought of moving back in with parents is a frightening option for many, some younger county residents are finding that even leaving the nest for the first time isn't an option either.

Hilary Brown of Garden Grove, 24, is a student at Orange Coast College and is also working her way through school. But Brown said her job working retail at Knott's Berry Farm in Buena Park doesn't pay enough for an apartment of her own or even with just one roommate.

Related Links

Matt Vevoda, 30, drives the 261 Eastern Transportation Corridor toll road to start his 70-mile commute from his job in Irvine to his home in San Jacinto, near Hemet. In 2011, after talking to friends paying high rents in Orange County and factoring in the expenses that come along with a hefty commute, Vevoda and his wife bought a three-bedroom, two-bath home for less than $200,000 in San Jacinto. While the commute can be tough, at times taking nearly three hours, he says that he's still saving money. LEONARD ORTIZ, ORANGE COUNTY REGISTER
Elia Guerrero stands in the doorway of her La Habra home that she got into with help from NeighborWorks of Orange County, which helps first-time/low-income homebuyers. KEVIN SULLIVAN, ORANGE COUNTY REGISTER
Noelle Park moved to Eastvale, near Corona. DOUGLAS PARK
Cole Harmonson moved to North Hollywood when she started her own company. COLE HARMONSON

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